How the Shrimp Tariff Backfired
Entrepreneurs are not easily thwarted by government intervention. Sometimes entrepreneurs respond so creatively that they render the interventionist measure almost meaningless. A classic example of an entrepreneurial response to state-sponsored plunder is the case of the US anti-dumping tariff on imported shrimp. Total shrimp imports to the United States have increased by 14 percent since the tariff was imposed, while domestic shrimp prices have decreased by 9 percent. Also, US shrimp imports from the six countries targeted by the tariff have increased by almost 20 percent since the tariff was imposed. FULL ARTICLE
Comments (3)
N. Joseph Potts
A quibble about plunder versus production: most quotations of Oppenheimer (and thus, Bastiat) on this dichotomy imply or state that these methods are MUTUALLY EXCLUSIVE.
Unfortunately, they aren't - nothing of the sort. Take the shrimpers. They've been producing and now, underbid by new competition, they're resorting to plunder. But they mean to (and can, for now) produce and supply shrimp at a price that includes a "plunder premium." They're both producing (or threatening to) AND plundering, with the plundering riding the back of the production. They continue to masquerade as producers, while new competition has rendered them uneconomical and hence, no longer producers. They're just owners of assets (shrimp boats, etc.) that are no longer economical to use, much like purchasing stock in (the North American operations of) General Motors. Much of their loss of economy, by the way, comes from regulations and taxes instituted by that government that is so eager to "protect" them from foreign competition.
The idea that what any given person does is either plunder or production usually doesn't apply to the parties pressing the case. The lawyers? They're pure plunderers. The overseas low-cost producers and their importers? They're pure producers.
But the erstwhile American shrimpers? Watch out for them! They're like terrorists hiding among an innocent population. They do both, and you'll mistake them for producers if you fall for their game.
I wonder if I could get the government to make someone pay me above market for a load of General Motors Common I still own. I know there are lawyers waiting to help me . . .
Published: August 1, 2007 10:26 AM
Chris Meisenzahl
Great story, I posted about this a while ago here.
http://amateureconblog.blogspot.com/2007/04/extortion-and-shrimp-tariffs.html
Published: August 1, 2007 10:45 AM
Paul Marks
Yes the General Motors story is complicated. Roads are mainly government projects (they should not be but they are). But I suspect that the interstate road system would have gone ahead (badly built as it is) even without pressure from G.M. or Ford. Indeed the last President (I believe) who expressed doubts about Federal government road building was Warren Harding.
The left often blame G.M. for the decline of mass transit (such as the L.A. system which G.M. bought and closed down in 1938), however they are slow to attack the regulations (such as price controls on tickets) which were the reason that mass transit was unprofitable.
So who is a producer and who is the game of plunder is complex.
The point about "shrimp" being a complex product remined me of an old example about steel.
"We must fix the price of steel" (some statist or other) - "which price?"
There are many types of "steel" and people want it in different quantities and at different times - it turns out there are hundreds of "prices of steel" and the number of prices (let alone the level of prices) is changing all the time.
Published: August 1, 2007 11:24 AM